Brazilian external debt in the 1990s in a historical perspective: The role of short-term portfolio investment and the shifting character of the Brazilian state during debt crises (Brazilian external debt in the twentieth century)

The objective of this dissertation is to trace some historical patterns regarding the role of international short-term credits and the role of the State during the major economics events involving the external debt of Brazil in the twentieth century. This enables us to better understand and evaluate the economic measures and events related to the 1990s external debt crisis. No attempt has been made to cover all aspects of the historic evolution of the Brazilian foreign debt. Rather, discussion is centered on two topics that we consider relevant for understanding the current period of the Brazilian external accounts.; The first of this two topics, is the degree to which capital inflow into Brazil was short-term (speculative) in selected historic periods---i.e., to see to what extent short-term resources financed the Foreign Exchange (FE) gap throughout these selected periods. Our thesis is that in the periods we studied that ended in debt crisis, speculative short-term capital flows had a substantial share in the financing of the FE gap. As we will see, they were present with more intensity in subperiods characterized by economic instability.; The second of these topics is the role of the State in the process of the external debt of Brazil. Specifically, our thesis is to find out if, historically, the State assumed all the risk by "nationalizing foreign obligations"---in which economic losses are socialized while economic gains are privatized---as was the case in the 1982 debt crisis. Viewed from a broad perspective, in economic subperiods classified as economically unstable in a given external debt cycle, the Brazilian State bailed out the risk of the private sector via the "nationalization" of the external debt. Moreover, contrary to the debt cycle of 1967--1982, the external debt "nationalization" of the 1990s follows a pattern similar to that in the external debt cycle of 1947--1962.; Finally, taking into consideration the different historical contexts, our dissertation concludes that the period from 1956--1962 is the one that most resembles the period of the 1990s, with its extreme external debt.